there still would have to be, under administrative procedure, a wide gap of time so that these steps could be complied with.

Senator SCHOEPPEL. Mr. Chairman.

Were you through, Senator?

Senator PAYNE. Yes..

The CHAIRMAN. Senator Schoeppel.

Senator SCHOEPPEL. I regret I was not here at the start of this session. I was held up by another session of the Agricultural Subcommittee, and I did not have an opportunity while here to read your statement, but I had been under the impression, going to the question that the Senator from Maine has asked, that the order was completely vacated or ineffective until, say, March the 15th of next year. Commissioner CROSS. That is right.

Senator SCHOEPPEL. I didn't know exactly what the status was, but I wondered if there was any change in that picture.

Commissioner CROSS. No; there has been no change in that picture. Those were the rules which we entered into as of November 30, 1953. Senator SCHOEPPEL. There have been a number of agricultural interests, through their representatives, expressing some alarm about going ahead with this matter.

Commissioner CROSS. This hearing will not involve the hauling of agricultural commodities. It will not involve the exempt-commodity clauses of the act, because they are already exempted, and will stay exempt, regardless of what we do.

Senator SCHOEPPEL. Then I take it now the matter is in such status that nothing can be done previous to March 15 of next year, as far as this past order is concerned, other than go ahead with your hearings, and

Commissioner CROSS. The three orders were entered. The first exempted agricultural commodities permanently, without any time limit on it. The other 2 orders had to do with the 30-day leasing provision, and the compensation provision, which were suspended; and the 2 regulations as to trip leasing and compensation are suspended until March 1, 1955.

The CHAIRMAN. March 15.

Commissioner CROSS. March 15, 1955.

I might say that

Senator SCHOEPPEL. I understand the chairman has indicated those were made a part of the record.

Commissioner CROSS. Yes; they will be supplied in the record.
Senator SCHOEPPEL. It is my fault. I wasn't here.

Commissioner CROSS. They will be supplied in the record, Mr. Schoeppel.

That is postponed until March 1, 1955, Senator Bricker; but if this matter hasn't been concluded by that time there is no intention that these rules shall come into effect.

The CHAIRMAN. Until the whole package is completed?

Commissioner CROSS. Until the whole package is completed.
Senator SCHOEPPEL. I have no further questions.

Senator MONRONEY. One further question: In answer to Senator Schoeppel, and I am sure it was an omission, you said agricultural exemptions. You mean the agricultural exemptions plus the return from an agricultural trip?

Commissioner CROSS. Yes.

Senator MONRONEY. That was the big issue we had before.
Commissioner CROSS. That is what I mean.

Senator MONRONEY. Yes.

Commissioner CROSS. The agricultural on the return movement.

That is what I meant.

Senator MONRONEY. Yes.

Now, can you tell me whether or not such an agricultural hauler can sign a new lease, trip lease, every time he makes a trip?

Commissioner CROSS. He can sign a new trip lease.

Senator MONRONEY. Every time he makes a trip?

Commissioner CROSS. Ever time he is moving back toward his point of origin or home base.

The CHAIRMAN. After his first movement.

Senator MONRONEY. After he first starts out?

Commissioner CROSS. After his first exempt movement, he can make a series of new trip leases, new trip leases back to his point of origin or home base.

Senator MONRONEY. And he is still exempt on that movement, no matter whether he wants to go by way of Chicago, if he is going to Florida, or

Commissioner CROSS. Providing it is in the general direction of his home base.

Senator MONRONEY. You said first he could go to Boston-
The CHAIRMAN. That is on the first movement.

Commissioner CROSS. On the first movement.

Senator MONRONEY. Yes.

Commissioner CROSS. He can go in either direction. He can go from New York to Chicago and then work his way home.

Senator MONRONEY. And when he returns to his home base he can make another agricultural contract and he will still be exempt. Commissioner CROSS. Yes.

The CHAIRMAN. Yes.

Are there any further questions?

If not, thank you very much, Commissioner Cross.

Chairman Johnson, do you have anything further to add? Commissioner JOHNSON. Nothing further, except Commissioner Knudson has come in. I don't know whether he has any comments to make?

The CHAIRMAN. Commissioner Knudson, do you have anything further to add?

Commissioner KNUDSON. Mr. Chairman, I was the witness before the House committee and I think everything the Commission authorized me to say was said at that time. I have nothing to add, except one point, Mr. Chairman, and that is in a sense we are all shooting in the dark as regards the exempt carrier until we get some statistical data on that carrier, and I would hope some time that the Senate would authorize the Commission or the Bureau of Public Roads or the Census Bureau, or some other agency of Government, to gather some statistical data on this so-called exempt carrier, of whom there are X numbers, so we will all know what we are doing in this whole field.

The CHAIRMAN. That is only a matter of appropriation. You have full authority to do it now.

Commissioner KNUDSON. Yes; I think it boils down to that.

Commissioner CROSS. Senator Bricker, and members of the committee, would it be presumptuous if I were to ask, on behalf of the Commission, if after this testimony has been offered the Commission feels it is proper that we should be permitted to make some further statement in writing?

The CHAIRMAN. You will be given that privilege. We certainly want the record complete and accurate.

Commissioner CROSS. Thank you, sir.

The CHAIRMAN. And that goes for any witness, of course, that might testify before the committee.

The next witness will be Mr. nie Adamson, of 100 Academy Avenue, Mount Lebanon, Pittsburgh 28, Pa.

You have no prepared statement, as I understand, Mr. Adamson? Mr. ADAMSON. No, sir. My statement will only consume about 5 minutes.

The CHAIRMAN. Thank you very much.

Mr. ADAMSON. There are so many other gentlemen here who are probably better qualified that I will cut mine short. The CHAIRMAN. Go right ahead.

STATEMENT OF ERNIE ADAMSON, MOUNT LEBANON,

PITTSBURGH, PA.

Mr. ADAMSON. I hardly think it is necessary for me to take up much time identifying myself as I have been here many times before. However, I want to say I have been engaged in this particular practice of law-that is, interstate commerce-for many years. I represent one particular company in Pittsburgh, the Dillner Transfer Co., who are deeply interested in this legislation.

In my opinion, this bill should be enacted into law for the purpose of protecting the constitutional right of freedom to contract of the so-called owner-operators as well as the certificated motor carriers.

I would like also to say this is not the first and probably not the last time that Congress will find it necessary to correct mistakes of the Supreme Court.

This decision of the Supreme Court on these leasing rules, I think, takes its position on the shelf of the Missouri v. Holland case.

The CHAIRMAN. I have heard of that case.

Mr. ADAMSON. Yes, sir; and I think in due time that one will be corrected, too.

The CHAIRMAN. It will have to be.

Mr. ADAMSON. Yes, sir; if the country expects to survive, it will be. Now, I would like to call the attention of the members of the committee to the fact that any shipper can go out and lease a truck and so long as that truck meets all the requirements of safety the Interstate Commerce Commission has no power to regulate the rates and charges, because any shipper who assumes full responsibility for a motor vehicle to haul his own products is free of all regulation, except safety requirements.

So, any truckowner who is 300 miles away from home, and empty, as a matter of commonsense, feels that economic requirements dictate that he should go home loaded, if possible. It would be a waste of tires, gasoline, wear and tear on his equipment if he didn't go home loaded.

If he leases his vehicle to a traffic manager of a manufacturing plant and they assume full responsibility for it, the Commission can't dictate to him what the terms and conditions of his compensation shall be, because that is private transportation.

Now, the crux of the Commission's proposed regulations are:

(1) The minimum period of time for which the lease shall endure; and

(2) They specifically say that the owner-operator shall not be paid on a basis which contemplates a percentage of the gross freight revenue paid by the shipper to that common carrier.

Now, the Supreme Court decision and I think Commissioner Cross' statement sets out very clearly that practically the only objectionable practice that amounts to anything is the so-called trip lease.

Well, I ask the committee here, in all fairness: What difference does it make whether the owner-operator is paid by a clear written contract 75 or 80 or 90 percent of the gross revenue returned on the shipment or whether he is paid a flat sum of $100?

If they observe the law, does that have any connection with trip leasing?

I venture to say that 90 percent of the owner-operators in the country today are operating their vehicles on bona fide leases. Some of them have been in effect 10, 15 years and they have been paid all this time on a percentage basis of the gross revenue. There is nothing wrong with that. There is nothing immoral, illegal, or improper about it, but that is the crux of the Commission's proposed regulation, and that is what they want to do-restrict the right of the owner-operator to exercise his freedom to contract.

Now, another question arises which is based on practical considerations. If a truck is empty 300 miles from home and somebody approaches that driver with the proposition, and they say to him, “I'll give you $150 cash to pick up such-and-such a load and deliver it to such-and-such a place that's on your way home; we'll say nothing about it, nothing on the record," and the drivers laughingly refer to that traffic as moonlight loads.

Now, if that driver is dishonest and he does that thing, does it make any difference whether he is on the regular payroll as a regular driver or whether he is an owner-operator?

It doesn't make the least bit of difference.

If he is dishonest and he is going to do it, he will do it anyway.
The only thing that restrains him is fear of being caught.

Now, of course, it is wrong; but you will find a small percentage of drivers who do it, just as you will find a small percentage of men in every industry in the world who will take the chances and will do things like that.

My point is this: The imposition of that restriction on the freedom of the parties to contract-in other words, it impairs the right to contract-will punish many small legitimate certificated trucking companies, and it benefits no one except that the restriction and inconvenience will interfere with the free movement of traffic by motor truck and will, of course, result in diverting some traffic to other carriers.

That is the only practical result of it.

There is no good claimed for it, so far as trip leasing is concerned.

Now, I have often wondered why the Commission did not take a step which they could take-and, of course, criticism is very cheap, and unless you have something to suggest at the time you criticize, your criticism is not worth very much. I have often wondered why the Commission didn't promulgate a simple regulation requiring that every motor carrier, either contract or common carrier, should not be required to operate a minimum or a nucleus of, say, 10 percent of its own vehicles operated by drivers on its regular payroll. If they did that, it would accomplish a great deal in the way of stability and at the same time it would give the flexibility which is necessary for the carriers to have when business booms and they require additional

vehicles.

That can be done and, in my opinion, should be done; but so far as the right of these parties to contract is concerned, the Commission proposes to put an iron band around that freedom and, although the TaftHartley law, as you know, exempts these owner-operators as independent contractors, and they are free from regulation in that source, the Commission would put the regulation on them that Congress relieved them of when they enacted the Taft-Hartley law.

Thank you very much, gentlemen.

The CHAIRMAN. Do you have any questions, Senator Schoeppel?
Senator SCHOEPPEL. No questions.

The CHAIRMAN. Senator Monroney.
Senator MONRONEY. No questions.
The CHAIRMAN. Senator Bowring.
(No response.)

Senator Payne.

(No response.)

Thank you very much.

Mr. ADAMSON. Thank you very much.

The CHAIRMAN. The next witness will be Mr. Charles F. Hawes, representing the National Council of Farmer Cooperatives, 744 Jackson Place NW., Washington 6, D. C.

Mr. HAWES. Mr. Chairman.

The CHAIRMAN. Just a minute. Before you begin, I want to say, for the benefit of the other members of the committee, as we said at the previous meeting, how much we regret the passing of one of the very active and able members of our committee, Dwight Griswold, but we want to welcome this morning-this is the first opportunity we have had, because Mrs. Bowring came in during the testimony of the first witness-Mrs. Bowring to this committee, who is taking the place of Mr. Griswold, whom she succeeded in the Senate. We are happy to have you with us, Mrs. Bowring. You may proceed, Mr. Hawes.

STATEMENT OF CHARLES F. HAWES, TRAFFIC MANAGER, DAIRYMEN'S LEAGUE COOPERATIVE ASSOCIATION, INC., NEW YORK CITY, ON BEHALF OF THE NATIONAL COUNCIL OF FARMER COOPERATIVES

Mr. HAWES. My name is Charles F. Hawes and I am traffic manager of the Dairymen's League Cooperative Association, New York City. Dairymen's League, a member of the National Council of Farmer Co